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  3. Journal of Economic Literature
  4. December 2001
  5. Review of de Soto's The Mystery of Capital

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

Review of de Soto's The Mystery of Capital

  • Christopher Woodruff
Journal of Economic Literature
vol. 39, no. 4, December 2001
(pp. 1215–1223)
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Abstract

In The Mystery of Capital, Hernando de Soto promotes his explanation of why formal capital markets function poorly in developing countries. De Soto argues that much of the population of developing countries lacks access to credit, not because they lack assets, but because ownership of their property is secured informally, which prevents the use of property as collateral. The inability to convert assets into capital keeps the developing world from benefiting from capitalism.

Citation

Woodruff, Christopher. 2001. "Review of de Soto's The Mystery of Capital." Journal of Economic Literature, 39 (4): 1215–1223. DOI: 10.1257/jel.39.4.1215

JEL Classification

  • O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
  • O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
  • P14 Capitalist Systems: Property Rights